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Fidelity's Denise Chisholm argues that technology stocks are positioned for further gains because their recent valuation reset likely already reflects concerns about slowing capital expenditure.
Speaking with Ed Ludlow on "Bloomberg Tech," Chisholm noted that the sector has experienced a rare 30% multiple contraction, a move that has occurred less than 5% of the time since 1990.
This compression has left technology stocks trading at only a 10% premium to the S&P 500, placing them in the bottom quartile of their historical range since the 1960s.
Chisholm explained that such significant multiple corrections skew the risk-reward profile in favor of outperformance.
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